India-EU Free Trade Agreement Concluded: Trade Leader Hails It as Timely Counter to US Protectionism
The long-awaited India–European Union Free Trade Agreement (FTA) has finally been concluded, and industry leaders are celebrating it as a significant milestone. S Rethinavelu, president of the Agri and All Trade Chamber based in Madurai, has warmly welcomed the agreement, describing it as a timely and strategic counter to the protectionist trade measures recently adopted by the United States.
Relief for Struggling Exporters and Boost for New Entrepreneurs
Rethinavelu emphasized that this FTA comes as a much-needed relief for Indian exporters who have been grappling with high tariffs imposed by the US. Many of these exporters were on the verge of exiting global markets due to these financial pressures. With the new agreement, he believes they will now be able to sustain their exports and even thrive in the competitive international arena.
Moreover, the FTA is expected to encourage a new wave of entrepreneurs to enter the export sector, fostering innovation and growth. By reducing trade barriers, it creates a more favorable environment for small and medium-sized enterprises to expand their operations and reach European markets.
Textile Sector Poised for Exponential Growth
Among all industries, Rethinavelu highlighted that the textile sector stands to gain the most from this agreement. He projected that exports to the EU could increase up to fivefold in the coming years, providing a massive boost to this labor-intensive industry. This growth will not only benefit large manufacturers but also support countless workers and ancillary businesses.
The agreement will also offer crucial relief to Indian textile exporters facing stiff competition from countries like Bangladesh, Pakistan, and Turkey. By securing better market access, Indian products can become more competitive on price and quality.
Widespread Benefits Across Multiple Sectors in Tamil Nadu
In Tamil Nadu, the impact of the FTA is expected to be particularly profound. Rethinavelu pointed out that duty-free access to the EU market will significantly boost labor-intensive industries, leading to large-scale employment generation. This is especially important for a state with a strong manufacturing base and a large workforce.
The sectors set to benefit include:
- Leather and footwear
- Chemicals
- Textiles and apparel
- Marine products
- Plastics and rubber
- Base metals
- Gems and jewellery
Currently, these industries face duties ranging from 4% to 26% when exporting to the EU. Once the FTA comes into force, they will enjoy zero-duty access, making their products more affordable and attractive to European consumers.
Long-Term Economic Growth and Global Positioning
Beyond immediate benefits, Rethinavelu stressed that the India-EU FTA will contribute to long-term economic growth. By strengthening trade ties with one of the world's largest economic blocs, India can accelerate its journey towards becoming the world's third-largest economy. The agreement aligns with broader national goals of enhancing global trade partnerships and reducing dependency on any single market.
In summary, the conclusion of the India-EU FTA is seen as a transformative development for Indian exporters, with the textile sector leading the charge. It promises to create jobs, boost exports, and solidify India's position in the global economy, all while providing a strategic counterbalance to protectionist trends elsewhere.
